There are many ways to reward your loyal staff, at Christmas time you might be thinking about a gift. The tax consideration for buying a staff gift is more complicated, as it involves Fringe Benefits Tax.

The two most important aspects to consider to maximise your tax deductions are: 

1) the cost of the gift needs to be less than $300 GST Inclusive for each staff member and: 

2) the gift should be a “Non-Entertainment” gift.  If you meet these two parameters, you will get a full tax deduction for the expense, and claim the GST credits and it has no FBT consequences.

If you spend above $300 on a “Non-Entertainment” gift, FBT will be applicable.

If you buy an “Entertainment” gift under $300, there is no tax deduction and no GST credit.

If you buy an “Entertainment” gift over $300, FBT will be applicable

Some examples of “Entertainment” gifts are: Theatre tickets, movie tickets, sporting events tickets, hired entertainers, flights and holiday accommodation, etc

Some examples of “Non-Entertainment” gifts are: Flowers, electrical goods; e.g. TV, bottled spirits and beer, Christmas hampers, gift vouchers, etc